cable-network president, and the vic-
tim who first brought the scam to the
attention of the U.S. Attorney's O ce,
not only lost a half-million-dollar per-
formance guaranty (plus a sixteen-
thousand-dollar late fee) but also found
herself subjected to a creepy late-night
phone call from Colonel Sherry. She
later described the call under oath: "He
said---this is kind of an embarrassing
and humiliating thing---'What kind of
punishment should I give you? When
my little girl does something wrong, I
spank her.' " Laurence told me, "They
were nothing but a bunch of bullies
playing dress-up."
John Kearns, a retired commercial
developer from Lake Tahoe, went to
great lengths to obtain the "bank letter"
required to secure a twenty-five-mil-
lion-dollar loan from the trust, travel-
ling to Toronto, Halifax, New York,
London, and Hong Kong. Every let-
ter was rejected by the trust. Colonel
Sherry hand-delivered the final de-
fault notice to Kearns at a cancer clinic
in the Bavarian village of Bad Heil-
brunn, where he was caring for his
wife, who was dying of Stage 3 multi-
ple myeloma.
Cesar, another shill named Cristo-
pher Berwick, and Colonel Sherry were
tried in Manhattan, during a three-
week period in August of 2002. All
three men were found guilty by the jury.
(Baron Moncrie e pleaded guilty after
his arrest. Prince Robert fled and is pre-
sumed dead.) Cesar didn't testify, but,
after he was convicted (five counts of
wire fraud, one count of conspiracy), he
made a lengthy statement at sentencing,
saying, in part:
I feel naïve and incompetent about not
being able to discern the real aspects from the
illegitimate parts of the transaction. I did not
do my duties as a broker and assist clients
with overseas company formation work in-
tending to harm or hurt anyone. I still believe
that the transaction was a viable one, that
some of the key people I was introduced to---
the V.P.s of the banks, different advisers to the
lenders, the Knights of Malta, the clients and
their own attorneys---were all impressive,
real, professional, and credible.
He concluded his statement to the court
by claiming that he was "not guilty, with
all my heart and soul."
His avowal of innocence failed to
sway Judge Shira Scheindlin. "Some
people have started out with less than
zero and were able to move on," she
noted. "But this defendant was raised
in reasonable middle-class circum-
stances and had a good education."
(Cesar attended Schiller International
University, in London, and the Univer-
sity of San Francisco, before earning an
M.B.A. at Golden Gate University.)
She rejected his petition for leniency
and, adhering to federal sentencing
guidelines, gave him thirty-seven
months, followed by five years of su-
pervised release. She also signed a
mandatory-restitution order requiring
that Cesar pay $1,222,494---nearly
half the sum stolen from the trust's
American victims. (Foreign losses,
which would likely have doubled that
figure, were excluded from the restitu-
tion calculations.)
The judge did grant Cesar's request
that he be allowed to serve his time at
F.C.I. Lompoc, a cushy low-security
prison in Southern California favored
by discerning white-collar criminals
such as Ivan Boesky. With its views of
mountains and cow pastures, Lompoc
sounded, to me at least, a lot like Swit-
zerland.
It seemed fitting that my former tor-
mentor had gone from a boarding
school regulated like a prison to a prison
run like a boarding school. I was all set
to visit Cesar at Lompoc, but then I dis-
covered, through an online "inmate lo-
cator" maintained by the Bureau of Pris-
ons, that he had been released after
serving seventeen months---barely half
his sentence.
"Whoa!" my son said when I told him
that Cesar was out. "Let's prank him. We
can get a dozen pizzas sent to his house."
My wife vetoed that idea, and insisted
that I make no contact until I knew what
I was dealing with.
She was right to worry.The consol-
idated rap sheet of the Badische gang
included embezzlement, racketeering,
arson, forgery, fraud, extortion, per-
jury, check kiting, probation violation,
grand larceny, assault and battery,
and domestic abuse.The most danger-
ous of Cesar's associates was proba-
bly Richard Mamarella, the trust's
Weehawken-based "litigation expert."
Mamarella was a gun-toting repeat
"It's disappointing that even the secret shadow
government can't get anything done."